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Santa Monica Housing Division - AHPP Owners

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AHPP Owners

The Affordable Housing Production Program (AHPP, also known as the Inclusionary Housing Program) is codified in Section 9.64 of the Municipal Code and requires developers of market rate multi-family developments to contribute to affordable housing production to help the City meet its affordable housing need. 30% of newly constructed multifamily housing in Santa Monica must be affordable to, and occupied by, low- and moderate-income households. For these affordable properties, the developer signs a deed restriction, which is recorded on title, and places restrictions on the property for a 55-year period.

Owner Responsibilities: Prior to initial lease-up

Prior to leasing up, the owner must:

  • Review the deed restriction agreement to confirm the specific requirements for the property, as they may vary from property to property.
  • If required by the deed restriction, submit a Marketing Plan or a draft lease for City review and approval.
    • A Marketing Plan is a brief explanation of how vacancies of deed restricted units will be advertised. The Plan should be submitted to the City’s Housing Division for review and approval.
    • The lease or rental agreement being used for the affordable units must be submitted to the Housing Division for review and approval. The lease must include language indicating that the property and the apartment is subject to affordability restrictions and make reference to the Affordable Housing Lease Addendum, which must also be attached. A copy of the Affordable Housing Lease Addendum template may be obtained from the Housing Division office.
  • Review the deed restriction to see if there’s a requirement to select tenants from the City’s waiting list or self-select. If self-selecting, income certification of tenants must be conducted.

Owner Responsibilities: Post initial lease-up

After leasing up, the owner must:

  • Conduct an annual recertification of tenants.
  • Submit an annual report to the City.
  • Submit tenant income documentation.
  • Notify the City if there are changes of ownership, management, or the leasing documents that are being used for the affordable apartments.

Filling Vacancies

  • When a vacancy occurs, follow the guidelines of the deed restriction and either contact the City to use the waitlist or implement the Marketing Plan if the property is able to self-select applicants. If the deed restriction allows for self-selecting a tenant, be sure to comply with the local live/work preference requirement and remember that the applicant’s income will need to be verified and documented, so that the documents can be submitted to the City with the next Annual Report.
  • If you take a waitlist or Section 8 tenant, you do not have to certify the household’s income (the City will do this for you).

Income Certification

Income is current pre-tax, gross income from any source, including the following:

  • Employment income including bonuses & commissions
  • Alimony
  • Social Security
  • Disability
  • Welfare
  • Unemployment benefits
  • Pensions
  • Financial aid (not including loans, but they should still be reported)
  • Supplementary benefits
  • Support payments (gift from friends & family included)
  • Income from the sale or leasing of real property
  • Ten percent of the value of any assets that are worth more than $5,000 (not including automobiles and furniture)

Assets include the following:

  • Checking and savings balances
  • CD and Money Market accounts
  • Mutual funds
  • Real estate
  • Trust funds
  • 401k/IRA
  • Stocks and bonds
  • Interest in business ventures
  • Life insurance policies

Verifying income:

To verify income, collect income declarations from all household members over 18 years of age. However, the income of a live-in aide is not considered if the tenant can verify the need for a live-in aide.

  • Gather income verification documents to back up the income declaration. Verification for income can be in the form of pay stubs, income tax returns, bank account statements, financial statements, stock certificates, etc.

To calculate annual income:

  • Add the income of each household member over the age of 18 and adjust as follows:  
    • Deduct $480 for each dependent (household member under 18 years of age)
    • Deduct $400 for any family with a head of household over the age of 62 years of age
    • Deduct medical expenses in excess of three percent of annual income for any elderly family.
    • To determine the value of each asset calculate the cash value (i.e. what is the asset worth once it’s converted to cash). For households whose total assets exceed $5,000, calculate the annual asset income by multiplying the value of the total assets by 10%. Add this total to the other household income to get the adjusted gross income.

View the current maximum income and rent limit charts

Annual Recertification and Reporting to the City's Housing Division

Deed restrictions require annual reporting to the City, which involves re-certification. Every year the owner or manager of a property with affordable apartments must certify the household's income to determine whether they have exceeded the maximum allowable income by 140%.

  • If a household exceeds the maximum allowable income by 140%, you may either move them into a different unit where they qualify for tenancy or serve them with a one-year notice to vacate.

Every year, landlords receive a letter from the Housing Division asking them to file their annual reports on the City website. Each property owner is assigned a user name and password to log in to the City's reporting website. In an effort to simplify and expedite the reporting process, the City is creating an online reporting system that allows you to use your personal username and password to log in and submit your report electronically.

Monitoring Fees (effective November 1, 2019)

All AHPP properties are subject to the below monitoring fees, to be paid to the City of Santa Monica.

  Ownership Rental
Annual Report/Monitoring* $34.89 $156.99
Initial (Sale/Start Up)** $156.99 $197.69
Resale/Re-occupancy*** $139.55 $168.62
*The Annual fee will not be charged in the same year as the Initial (aka "Start Up") fee.
**The Initial fee is only applicable to NEW constructions for both Ownership and Rental.
***Dependent on whether use of SM Housing Division waitlist is necessary for re-occupancy for Rental property.
These fees permitted by City Ordinance and established by City Resolution.

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